Common Sense Legislation

President Bush signed the Pension Protection Act of 2006 yesterday, overhauling pension and savings rules intended to make employers stick to actually paying out the pensions that they offer their employees.

"Americans who spent a lifetime working hard should be confident that their pensions will be there when they retire," Bush said.

He added a stern instruction to corporate America.

"You should keep the promises you make to your workers," the president said. "If you offer a private pension plan to your employees, you have a duty to set aside enough money now so your workers will get what they've been promised when they retire."

How can anybody argue with that? Well, here's an attempt:

The law is not without its critics, some of whom say it does nothing to encourage employers to offer pension benefits and the reliable income they give retirees.

Rep. Charles Rangel of New York, the top Democrat on the House Ways and Means Committee, said lawmakers may look back at the law as the "Trojan horse that brought the end of the defined benefit pension system."

"Erosion of the defined benefit pension system represents a dangerous shift from a 'we' society to a 'me' society, where every worker is on his or her own," he said.

I don't think there's a need to "encourage" or force employers to offer pension plans. That's not the point - it's about those companies that do offer pensions making good and actually paying out on them as promised. And if this leads to no companies offering pensions, so be it. I think most people would much rather have their company say, "We don't offer a pension plan" than to say "We offer an exceptional pension" and then not actually pay it out when they retire.